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December 4, 2008

Gartner Group has recently spoken out again on the field of SaaS. Particularly they point to surging interest as the model begins to reach maturity.

I like this model. I really like it. It goes beyond an Internet supported by advertising and makes it useful for more than just chatting to each other and expressing our varied opinions.

How does it work? (For the uninitiated) SaaS is basically online software. Small, niche and very useful applications that fill a need for a realistic price.

The model is great because infrastructure is a browser, access is global, implementation is a lot quicker, and the pricing is a small monthly license. But more than that, it creates permission. Permission to have a conversation about related subjects.

I used to have an account with Salesforce.com back when I did sales stuff. As a result I would regularly read through their tips, and their newsletters. I attended their Webinars and I continue to watch their movements today.

Why? Because people buy from people they trust. If I have permission to discuss related issues with you then we can build up a relationship built on trust, and you will be more likely to be interested int eh services I offer alongside the SaaS product.

Do I think SaaS can support an entire company? Not any more. I think that the NetSuite's, eMaint's, Salesforce.com's and WorkDay's are already there to fill that space. And some other giants like SAP are rushing in.

There is still room in the re-seller space I think. Astadia has done exceptionally well out of being ahead of the curve, and others are springing up alongside them. In particular there are niche SaaS applications that need re-sellers, they already have a great product that is in need of distributors, and in need of

But...I do think it can add value to a consulting company in many ways.Particularly if it is a unique product, that is priced for credit card purchases. It will give you passive income, a lever to sell further services, and most importantly of all - it will give you what Seth Godin calls a permission asset!

The most prized asset your company will have, and one of many permission assets that it should have.

The bad side of SaaS, and the problem that these large and medium sized companies are soon going to be facing, is that if they try to get by on their product / services alone - then the competition point is price, and they are all exchangeable commodities.

So the answer is to use the permission these companies have. To reach out and help the clients to do more than just use their product. Help them to network with each other and provide them with other leading practices that are not totally dependent on your software solution.

Getting into the SaaS game is not hard. Force.com (from Salesforce.com) provides a platform, and there are at least a dozen other companies that provide similar. So there is a place where you can build these products without having to erect all the infrastructure.

And if you can't program then there's elance.com and rentacoder.com to the rescue. Just two of the burgeoning number of sites where you can connect with technically capable people to do the work for you. Heck, you can even see their references right there on the site.

But be smart about it. There is already a lot of stuff out there that has been done to death. No more expenses, timesheets, payroll apps, scorecards or HR resource training apps...PLEASE!

What is niche, worthwhile, will help you in your conversation with your target groups, and small?

Succession planning? Mobile integrated defect recording? Production management? Inventory real-time analyzers from bar coding devices? What about some application that lets you plan, track and analyze the effectiveness of your social media campaigns?

I am working on something now for the engineering field. Nothing fancy. But it is small, niche, powerful and scarce. I will let you know how it goes.

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